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Alberta teachers' union claims victory after reaching pension fund agreement with AIMCo

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The Alberta Teachers’ Association is claiming victory after reaching an agreement last week to keep full control of the investment strategies guiding teacher pensions.

© Shaughn Butts Alberta Teachers’ Association president Jason Schilling.

The new investment management agreement between the Alberta Teachers’ Retirement Fund (ATRF) and the government-owned investment manager Alberta Investment Management Corporation (AIMCo) replaces a previous order quietly signed by Finance Minister Travis Toews in December.

In a Wednesday news release , the ATRF said the new agreement allows its board to maintain “control over the strategic investment policy for the pension plans’ assets and that AIMCo must implement that policy.”

The Alberta Teachers’ Association (ATA) said the new terms remove a clause giving AIMCo a veto over investments, and president Jason Schilling called it a “huge victory for teachers” in a Wednesday release.

“Teachers mounted a strong, wide-reaching, relentless campaign in defence of their pensions, which provided the ATRF with the backing they needed to negotiate an effective agreement that protects the interests of teachers,” said Schilling.

With Toews’ ministerial order no longer in force, the teachers’ association said it’s dropping its legal challenge, filed in March, that argued for the government decree to be thrown out by the courts.

It came after the UCP government’s Bill 22, implemented in November 2019, legislated the transfer of investment control of 82,000 practising and retired teachers’ pensions to AIMCo from ATRF by next December, along with control of three other large public sector pension plans.

Toews has said repeatedly that public sector pension boards, including the ATRF, would continue to control their own investment strategies and decisions. In January, his office said the order dictating AIMCo’s investment management agreement with the ATRF was a necessary, temporary measure.

On Wednesday, Toews said in a statement the government is pleased to see AIMCo and the ATRF come to a deal.

“Having AIMCo manage the investments of the ATRF eliminates duplication and reduces the cost of investment services for Albertans and teachers. This was our ultimate goal,” said Toews.

Toews’ did not respond to a question from Postmedia about whether or not the ATA’s legal challenge was a factor.

However, Schilling attributed the new deal in part to the prospect of the government losing in court.

“Our court challenge against the imposed (investment management agreement) — backed up by significant pressure from teachers — changed the game. I believe that we were on our way to winning in court. Under the new CEO (Evan Siddall), AIMCo appears to realize that they need to be responsive to clients and that they will be held accountable for their duty to teachers as the investment manager,” said Schilling.

NDP Opposition labour critic Christina Gray said in a statement Wednesday it was an important win for teachers and their pension fund, but other public sector funds moving under the umbrella of AIMCo because of Bill 22 deserve to choose their own management firms.

“Until that time, the UCP has created a forced monopoly that gives AIMCo ‘hostage’ clients, regardless of their performance. This isn’t fair. Albertans expect their government to fund classrooms, not spend money fighting teachers in court,” said Gray.